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Pepco Energy Services, Inc., a subsidiary of energy delivery company Pepco Holdings, Inc. (POM - Analyst Report), received an energy savings contract from Sarah Bush Lincoln Health System (“SBLHS”) in Mattoon, Ill. Per the contract, Pepco Energy will install new energy conservation measures worth $3 million in twelve buildings.

Pepco Energy will work on exterior LED lighting retrofits, building automation system upgrades, water conservation measures, steam system improvements, ventilation system retrofits and building envelope sealing of these twelve buildings. The buildings will include a hospital, medical centers, office buildings and clinics.

We believe energy efficiency programs like this not only lead to effective utilization of electricity but also help to reduce the emission of green house gases. The energy conservation measures will add up to an annual savings of $334,000 for SBLHS and lower the green house gas emission by 4.4 million lbs. per year.

All the upgrades are expected to be completed by Dec 2013. Pepco Energy Services’ expertise in implementing energy efficiency measures won them the contract. The company had implemented quite a few energy efficiency programs in 2012. The last one was in June 2012, when Pepco Energy fitted $1.2 million worth of energy saving equipment in the Mineral Wells Independent School District, Texas.

Coal-fired generation plants have lately come under fire from environmental activists and the Obama administration has in response implemented stringent regulations. Usage of scrubbers in coal fired generation units, the increasing uptake of natural gas to produce power and power production from alternate renewable sources will definitely help to lower emission.

However, the demand for electricity will continue to increase with increasing dependence on gadgets and modern amenities. The effective and efficient usage of energy through comprehensive energy savings measures will play a vital role in shaping our future demand for energy.

Pepco Holdings currently has a Zacks Rank #4 (Sell). Other well-placed utilities at the moment are Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report), IdaCorp, Inc. (IDA - Snapshot Report) and Integrys Energy Group, Inc. (TEG - Analyst Report). All of these currently retain a Zacks Rank #2 (Buy).

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